Secrets of a Strong Incentive Plan (Part II)

There are two main principles you must understand to create a strong incentive plan. The first principle is to understand that the method in which the incentive is provided determines how staff react to that incentive. These three secrets helped explain that principle:

(SECRET ONE) TIMING MATTERS.The quicker people receive their incentive, the more impact it will have.

(SECRET TWO) CONSISTENCY MATTERS.If the incentive is certain, then staff will have confidence that there is a consequence to the behavior or outcome. If the incentive is uncertain, then staff will find reasons not to be compliant if there is a path of lesser resistance.

(SECRET THREE) POSITIVE AND NEGATIVE INCENTIVES MAY NOT MATTER AS MUCH AS YOU THINK.Although today’s culture focuses on positivity, many studies show negative incentives work just as well as positive reinforcement if not better. But the best practice is to combine positive incentives for correct behaviors and negative incentives for conscious incorrect behaviors.

Now we will move on to our second principle:

You must understand what motivates behavior and use those motivators well to build a successful incentive plan. There are four main motivators that lead people to the decisions they make.

Time: If staff find a quicker way or short cut to get the job done, they will adopt the shortcut.

Effort: If staff find an easier way to do the job, they will adopt the easier way.

Enforcement: If management is not monitoring and using incentives and discipline to motivate staff towards the correct behaviors, staff will do what they think is best.

Bonus or Rewards: If staff find additional bonuses like getting longer breaks because they get the job done quicker, they will adopt the shortcut.

Staff will always look for ways to get the job done quicker and easier. That is rational and a good thing if harnessed properly. That ingenuity leads to innovations that improve productivity, efficiencies and services. But changes to the SOPs (standard operating procedures) must be methodical with a good quality/process improvement program like TapRooT®. Violations of the SOPs must be recognized quickly and addressed appropriately.

Enforcement of SOPs is key to making sure staff don’t start taking shortcuts because they want to get the job done quickly and with less effort which often incurs unnecessary risk. Staff who are looking to get the job done don’t always looks at the big picture and understand the risks involved when they violate the SOPs. Appropriate auditing and supervision processes catch staff veering off the SOP. Staff taking shortcuts is addressed with a conversation about why following the SOP is important and mandatory. Once staff know the “WHY,” they will likely be more compliant and realize management cares enough to take the time to explain the “WHY”. That conversation is a good first step (and hopefully last for that staff member) in a progressive discipline process. Documenting that conversation with your staff member shows the importance of following the SOP and provides a record that the wrong behavior was addressed with the “WHY” conversation and clear consequences of not following the SOP were discussed. A good reward or incentive that is soon, certain and positive will also motivate the right behaviors. And if the staff member violates the SOPs again, then they know management has no choice but to go to the next step of the progressive disciplinary process laid out in that conversation.

You can’t write an effective incentive plan if you don’t know why the staff member decided not to follow the SOP. A good RCA investigation like TapRooT® will bring that information to light so you can eliminate the bonuses or rewards for violating the SOPs while encouraging compliance with an incentive plan. An incentive plan that is soon, certain and balanced with positive and negative incentives that reward the correct behaviors and discipline for the incorrect behaviors.

If you have any questions about building incentive plans that can be used as a corrective action for eliminating the root causes of problems in your organization, please don’t hesitate to contact me at marcus.miller@taproot.com.